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Wireless auctions draw big bids

Two bidders fight it out for London region as 3.4GHz auctions draw to close

Fierce bidding has broken out in the 3.4GHz wireless auctions for the licence in the Greater London region, with prices hitting £1.92m, as two companies match each other bid for bid.

Poundradio, set up by Hong Kong-based phone company PCCW, is the current bid holder, meeting the last required bid of £1.92m. Red Spectrum will have to meet the next bid of £2,115,000 to remain a contender.

Currently holding the highest bids for the Midlands and Northern Metropolitan regions, Poundradio is likely to take around 12 of the 15 licences in all. Bids have reached £660,000 for the Midlands and £330,000 for the Northern region.

The only other remaining company in the bidding war is Public Hub, which is bidding for the Southern regional licence and holds the current top bid of £330,000 for this region.

The auctions are expected to end as soon as the bidding war between Poundradio and Red Spectrum is over.

Bids have exceeded most analyst predictions. The licences were expected to beat their reserve bids, but not to reach the current figures.

The enthusiasm shown by bidders is in contrast to the last round of auctions three years ago for the 3GHz spectrum. These failed to generate interest, with many licences left up for grabs.

Tzvi Slonimsky, chief executive officer of wireless equipment vendor Alvarion, said the interest in this auction was good news.

"Considering the lack of interest in the last auctions, the fact that companies are willing to bid higher prices for the licences means they believe that their interest is justified and the business model they have is sound," he told vnunet.com.